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HPD Chief Could Get A Lucrative Cash Payout Along With Pension

Although he’s the target of an ongoing federal corruption investigation, Honolulu Police Chief Louis Kealoha is expected to receive a substantial cash payout as part of a retirement agreement being negotiated with the city.

That lump sum payment will be in addition to his regular six-figure pension and other retirement benefits.

The deal is being negotiated in secret and comes after Kealoha abruptly agreed to retire in the face of the federal investigation. The full details of the settlement will not be made public until the Honolulu Police Commission finalizes the deal at a meeting on Jan. 18.

But what little information has surfaced about Kealoha’s retirement agreement is raising questions about whether the commission — which is the only entity that can hire or fire the chief — is acting in the public’s best interest.

Police Chief Louis Kealoha is expected to get a lump sum payment as part of a negotiated settlement agreement that comes while he’s under investigation for public corruption.

Cory Lum/Civil Beat

“Given the wait-and-see attitude this commission has had for over two years, I just don’t understand why there’s such a rush to make a settlement,” said Alexander Silvert, a federal public defender who has been closely involved in the investigation.

“Here’s a man facing possible indictment for corruption in his position as chief of police, so what are you doing paying him off?”

Silvert is credited with launching the U.S. Justice Department investigation after he uncovered evidence that he said showed the chief and his wife, Katherine, a high-ranking city prosecutor, had worked with other HPD officers to frame her uncle, Gerard Puana, for the theft of their mailbox to settle a family score over money.

Silvert was Puana’s defense attorney and in December 2014 turned over evidence to the FBI that he says proved that his client was set up by the Kealohas. Silvert and others familiar with the case have said the investigation has since expanded.

The police commission, however, refused to address any of the allegations until recently, when the chief was notified last month by the FBI he was the target of an ongoing grand jury investigation into criminal activity. Kelaoha voluntarily placed himself on leave with pay, while the commission scrambled behind closed doors to figure out how to respond.

Last week, Police Commission Chairman Max Sword announced that Kealoha had agreed to retire, pending a negotiated settlement between Kealoha’s attorneys and city officials. He refused to answer any questions about it.

On Monday, Sword again refused to release any details of the settlement, saying only that it was still being worked out. He added that the commission’s decision to accept the deal would be subject to a vote outside of public view. The full details, he said, will only be released after a final decision is made.

“It’s a sensitive matter and we’re trying to cross the t’s and dot the i’s,” Sword said. “The public can comment after we finalize it.”

Honolulu Police Commissioner Steven Levinson, however, provided some details about what was discussed during the commission’s closed-door sessions last week. Levinson said he expects the chief will get a lump sum payment as part of his settlement agreement, although he would not reveal a dollar amount because that’s the subject of ongoing negotiations.

Honolulu Police Commissioner Steven Levinson, left, is one who would rather pay Kealoha more money to leave HPD now than wait for a conclusion to the investigation.

Cory Lum/Civil Beat

He noted that Kealoha will also receive the retirement benefits owed to him for his 33 years as a city employee. Kealoha’s current salary, according to the city, is set at just over $182,000. Depending on the variables used to calculate his public pension benefits he could earn around $150,000 a year once retired.

Levinson said the pending agreement with Kealoha will also likely include some form of indemnification language that could prevent the chief from taking certain legal action against the commission after the deal is signed.

While Levinson defended the commission’s decision to work in secret rather than discuss the chief’s status in public, he said the full settlement agreement and reasoning will be released once it’s final. He said the secrecy is needed at this point so that both sides can come to an amicable solution.

Levinson added that it’s important for the commission to act now rather than wait for the outcome of the federal investigation, even if that ends with an indictment, so that the healing process at HPD can begin. He said morale within the department has suffered as a result of the corruption probe, and he considers any extra money thrown Kealoha’s way a small price to pay for an immediate solution.

“It’s a balancing exercise,” Levinson said. “It’s not just a slam-dunk, self-evident proposition that the commission ought to sit on its hands for an indefinite period of time and take up the matter later while letting the status quo continue to stew.”

Levinson said trying to terminate the chief rather then allowing him to retire could create a different set of problems. The chief would have the opportunity to address the reasons for termination at a public hearing, and that could result in what Levinson called a “state of warfare” that he said he preferred to avoid.

“That would be protracted and painful for everybody,” Levinson said.

But not everyone on the commission is on board with allowing Kealoha to leave with a lucrative retirement deal while the chief and his department are still in the middle of the corruption and conspiracy case.

Like her colleagues, Honolulu Police Commissioner Loretta Sheehan refused to discuss the terms of Kealoha’s settlement proposal. But Sheehan, who is a former federal prosecutor, did confirm that she was the only commissioner to vote against the deal while it was being hashed out in closed-door meetings last week.

Sheehan wouldn’t say why she voted against the settlement, only saying that she and her colleagues had agreed — again behind closed doors — to leave public statements involving the chief’s status up to the chairman.

“I will confirm that I was the only commissioner who voted against the agreement in principle,” Sheehan said, noting that the final terms could change before it is disclosed to the public at the Jan. 18 rolls meeting. “I gave my word to the commission that I would permit the chair to be the sole voice to discuss the chief’s personnel issues. I want to honor that commitment, so therefore I will have to express my views within the context of the public meeting.”

When asked whether she thought the terms of the preliminary agreement were in the best interests of the public, Sheehan acknowledged that giving money to someone who could one day face criminal charges related to public corruption was concerning.

“Certainly that was part of my reasoning in voting against the agreement in principle,” Sheehan said. “I wasn’t sure it was in the public’s interest.”

Myles Breiner says that Kealoha has an exemplary record with HPD and shouldn’t be blamed for the wrongdoing of other officers.

Cory Lum/Civil Beat

Kealoha’s criminal defense attorney Myles Breiner said it’s premature to discuss any of the details of the settlement because the terms are still being negotiated.

Breiner said it’s important to understand the full context with which the commission is making its decision. The chief has yet to be charged with any crimes related to the corruption probe. He’s also received high marks from the commission ever since he was appointed in 2009 to take over the 20th largest police department in the country.

But Breiner, who has brought lawsuits against the police department for misconduct, excessive use of force and wrongful death, said the chief is also the de facto “fall guy” whenever there are serious problems happening within HPD.

Changing the chief doesn’t automatically improve the culture at the department, he said. That responsibility lies with the police commission, which recently received more power to conduct investigations into officer misconduct.

“You can’t hold the chief personally responsible for every single officer’s mistakes, errors or misconduct,” Breiner said. “Getting rid of the chief doesn’t necessarily improve the quality of the department. It’s something more systemic, I suspect, in the way the department is run, and that comes down to the police commission.”

Still, an underlying concern is whether the police commission has been following the state’s Sunshine Law and being as transparent as it should be about the chief’s ongoing legal troubles.

He said the same issues are at play when it comes to the chief’s settlement agreement. The public should be allowed to listen in on the commission’s deliberations no matter what deal is being negotiated.

“This is just a continuation of the same questions as to whether the public has any interest in what’s happening with the police chief,” Black said. “I think the public has a very strong interest and legitimate interest in knowing what’s going on with the police chief and how his status is being handled by the commission. Those discussions should be occurring in public.”

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